HFQ up on Amazon

Thank you for that explanation RFC, it's a shame that the court misinterpreted the facts. On the other hand, S&S don't have to sell to Amazon, do they? I know that it would be unwise, market-wise, for them, but nobody can actually force them to sell to Amazon.

Keith_w wrote:Thank you for that explanation RFC, it's a shame that the court misinterpreted the facts. On the other hand, S&S don't have to sell to Amazon, do they? I know that it would be unwise, market-wise, for them, but nobody can actually force them to sell to Amazon.

No one can "force" them to sell to Amazon, but Amazon's avowed purpose is to be THE source for e-books )(or anything else you might want to order online), and it has become such a huge player that refusing to list on their site is tantamount to simply writing off a [pi]large[/I] percentage of your total sales, especially with e-books. That's where customers look first, and those who look there first are overwhelmingly likely to buy there . . . or nowhere. Even Baen has been forced to accept Amazon's pricing opolicies (and dominance of the market) because they simply couldn't afford to let all of those sales go by. In the end, making a sale worth $1 is a lot better than making no sales even if $1.75 would be much closer to the fair value of the sale, if you see what I mean.

It's sort of like an echo of that saying: "If you owe the bank $50,000 and can't pay, you're in trouble. But is you owe the bank $50,000,000 and can't pay, the bank is in trouble."

Keith_w wrote:Thank you for that explanation RFC, it's a shame that the court misinterpreted the facts. On the other hand, S&S don't have to sell to Amazon, do they? I know that it would be unwise, market-wise, for them, but nobody can actually force them to sell to Amazon.

Of course if all of the publishers got together and agreed not to sell to Amazon, then Amazon screams collusion, and files an anti-trust suit that would end up costing publishers major amounts of money.

runsforcelery wrote:

Keith_w wrote:Thank you for that explanation RFC, it's a shame that the court misinterpreted the facts. On the other hand, S&S don't have to sell to Amazon, do they? I know that it would be unwise, market-wise, for them, but nobody can actually force them to sell to Amazon.

No one can "force" them to sell to Amazon, but Amazon's avowed purpose is to be THE source for e-books )(or anything else you might want to order online), and it has become such a huge player that refusing to list on their site is tantamount to simply writing off a [pi]large[/I] percentage of your total sales, especially with e-books. That's where customers look first, and those who look there first are overwhelmingly likely to buy there . . . or nowhere. Even Baen has been forced to accept Amazon's pricing opolicies (and dominance of the market) because they simply couldn't afford to let all of those sales go by. In the end, making a sale worth $1 is a lot better than making no sales even if $1.75 would be much closer to the fair value of the sale, if you see what I mean.

It's sort of like an echo of that saying: "If you owe the bank $50,000 and can't pay, you're in trouble. But is you owe the bank $50,000,000 and can't pay, the bank is in trouble."

ah well, what's a poor boy to do but buy hardbacks but not from Amazon.

runsforcelery wrote:

... it was Amazon's policy of steeply discounting the electronic prices for books by especially popular authors as an inducement to customers ...

...
With e-books, the process is quite different, and the publishers' (and authors') earnings per book are based on Amazon's selling price ...

RFC, thanks for explaining that. I was under the impression that the publisher was still setting the "wholesale" price (with appropriate volume discounts) and therefore Amazon could proceed to sell the ebook at whatever the wanted, just like the hard copy books. On the other hand, I must point out that while waiting for the next Safehold book I have read several books that were free on Amazon that were the first books in a series. That forced me to purchase the remaining books because I had to see where the series went from there (so now I am waiting for three or four books in instead of just the next Safehold book ). I also read three or four others I also would not have purchased that were not worth paying for the remaining series books, so all in it has been worth it to me.

DennisLee wrote:

runsforcelery wrote:

... it was Amazon's policy of steeply discounting the electronic prices for books by especially popular authors as an inducement to customers ...

...
With e-books, the process is quite different, and the publishers' (and authors') earnings per book are based on Amazon's selling price ...

RFC, thanks for explaining that. I was under the impression that the publisher was still setting the "wholesale" price (with appropriate volume discounts) and therefore Amazon could proceed to sell the ebook at whatever the wanted, just like the hard copy books. On the other hand, I must point out that while waiting for the next Safehold book I have read several books that were free on Amazon that were the first books in a series. That forced me to purchase the remaining books because I had to see where the series went from there (so now I am waiting for three or four books in instead of just the next Safehold book ). I also read three or four others I also would not have purchased that were not worth paying for the remaining series books, so all in it has been worth it to me.

Amazon is following in the steps of Baen here - like all good dealers, the first sample is always free. Baen has been doing this for over a decade now, apparently talked into it by Eric Flint.

DennisLee wrote:

runsforcelery wrote:

... it was Amazon's policy of steeply discounting the electronic prices for books by especially popular authors as an inducement to customers ...

...
With e-books, the process is quite different, and the publishers' (and authors') earnings per book are based on Amazon's selling price ...

RFC, thanks for explaining that. I was under the impression that the publisher was still setting the "wholesale" price (with appropriate volume discounts) and therefore Amazon could proceed to sell the ebook at whatever the wanted, just like the hard copy books. On the other hand, I must point out that while waiting for the next Safehold book I have read several books that were free on Amazon that were the first books in a series. That forced me to purchase the remaining books because I had to see where the series went from there (so now I am waiting for three or four books in instead of just the next Safehold book ). I also read three or four others I also would not have purchased that were not worth paying for the remaining series books, so all in it has been worth it to me.

The major difference between the way the pricing is set for paper books vs e-books, is of course that there are physical copies of a paper book, for which you can say, give me x dollars and I will turn over this paper book, for e-books, you turn over 1 copy to the reselelr, you have turned over all the copies of it that the reseller needs.

runsforcelery wrote:

Actually, no. That was what that ridiculous law suit against Simon and Schuster (which, unfortunately, Amazon won) was all about. The publishers wanted control of the e-book prices and Amazon argued that would cost the public more than Amazon's pricing policies would. If you looked carefully at what they were really fighting about, however, it was Amazon's policy of steeply discounting the electronic prices for books by especially popular authors as an inducement to customers; they were not discounting prices on low-number-of-sales books like e-text books or other "must have" volumes.

I would hope that Simon and Schuster appealed this abortion of a decision. Hopefully the appellate court will recognize the total unfairness of this decision, and reverse it.

Sorry to have to disagree with you, but I believe you are entirely wrong on this.

The initial deal with Kindle books was exactly the same as the deal with regular books: publisher set a wholesale price, and Amazon paid that price for every book they sold, be it physical or Kindle.

Apple and the publishers came out with the "Agency Model", where publishers would set the final retail price, the seller would get 30%, and the publisher would get 70%. After the publishers forced this on Amazon, it led to Amazon getting more per book in most cases, but also led to higher prices.

So no, Amazon was not gouging authors or publishers by setting lower prices. What it was doing was creating a "mindspace" that you "shouldn't" have to pay more than $10 for an eBook, and that is what publishers were fighting. (Note that all Baen eBooks went for $6 at the time, so it's not like Amazon was setting an unreasonably low price point.) Amazon was often paying publishers more for teh eBook than readers were paying Amazon, and it's the publishers that forced Amazon to stop doing that.

Things I'm less certain about:
IIRC, the reason Amazon won the lawsuit was because it's considered anti-competitive for manufacturers to set up a cartel to force a retailer to sell at a certain price, which was what the publishers did. If publishers are now only getting $0.70 when Amazon sells their book as a $1 loss leader, blame the publishers, not Amazon, because it's the publishers who fought to make that so.

And yes, Baen books has joined the Borg of Amazon. In order to protect the Baen authors, Baen agreed to a higher price on Amazon than they'd previously been charging, a price increase that doesn't affect eARCs or the monthly bundles, just the individual book price. In exchange for which people with Kindle's no longer have to stand on their heads in order to get Baen eBooks onto their devices. Not seeing the anti-publisher / anti-author behavior here.


For the last couple of centuries, publishers have been the "gatekeepers", getting to decide what books would be allowed out. Amazon is ending that. Good.

runsforcelery wrote:

GlynnStewart wrote:I suspect it tends to be a matter of 'what does Amazon have on sale this week.'

One of the things I've learned in self-publishing is that Amazon seems to give the publisher 100% control of the e-book price, but they seem to have control to do whatever they want with the print copies.

Actually, no. That was what that ridiculous law suit against Simon and Schuster (which, unfortunately, Amazon won) was all about. The publishers wanted control of the e-book prices and Amazon argued that would cost the public more than Amazon's pricing policies would. If you looked carefully at what they were really fighting about, however, it was Amazon's policy of steeply discounting the electronic prices for books by especially popular authors as an inducement to customers; they were not discounting prices on low-number-of-sales books like e-text books or other "must have" volumes.

With dead-tree books, the publisher didn't care what the sale price was, because Amazon still had to buy them wholesale from the publisher before they sold them. If they wanted to sell the newest Stephen King hardcover for a buck apiece as a loss-leader to encourage additional sales of other books, that was fine; the publisher and the author had already earned their programmed profit and royalties, respectively, from the book, whatever the price at which Amazon chose to sell it to the public.

With e-books, the process is quite different, and the publishers' (and authors') earnings per book are based on Amazon's selling price, not the publisher's wholesale price. It's a nice deal for Amazon, and the sheer size of the market share Bezos has captured means that, in the end, the publishers have to geek to Amazon's policies. Especially when a thoroughly stupid federal court judge completely misunderstands what's going on and sides with Amazon in a move which actually costs the reading public more, overall, given their pricing structure for all books sold rather than the bestsellers which Amazon's brief pretended (and the judge bought off on) were the only books affected.

While on balance, Amazon have been good for the book-buying public, these things can be pushed too far; we see the same thing in the UK where milk prices have been used by the big supermarkets as a loss leader and as a result, most milk farmers are now losing money.

in the world of eBooks, there is a virtual monopoly by Amazon and Kindle - and whenever a market is controlled by one person (whether that be published, distributor or anyone else) problems will eventually arise